Mortgage Bonds Without Government Backing Face Tough Time

Nonagency Debt Essentially Collapsed During Financial Crisis

The market for mortgage bonds that aren't backed by the government suffered a setback this month, when one offering was shelved and another had to slash its price amid tepid investor demand.

PennyMac Mortgage Investment Trust, a firm run by former Countrywide Financial President Stanford Kurland, cut prices on its debut mortgage bond at least twice to attract buyers, said investors who considered the offering. The firm sold a...